Country ... Congo
Conflict Minerals

New Enough Report: Dodd-Frank Bill Leads to Decrease in Conflict Minerals Trade in Congo, Smuggling Remains a Concern

COMMENTARY

Peter Burgess

New Enough Report: Dodd-Frank Bill Leads to Decrease in Conflict Minerals Trade in Congo, Smuggling Remains a Concern

Over the past 18 months, companies and governments have taken significant steps toward cleaning up supply chains that are sourcing minerals from eastern Congo. A new investigative Enough Project report released today assesses the Dodd-Frank Act’s impact on the conflict minerals trade in eastern Congo thus far.

The new report, which is based on field interviews with 143 people in Congo and Rwanda, found that Dodd-Frank legislation and more stringent tech industry sourcing policies have led to an estimated 65 percent decrease in profit over the past two years for armed groups in eastern Congo from their trade in the conflict minerals of tin, tantalum, and tungsten. The report also found that this financial strain, coupled with military pressure, has attributed to a 75 percent decrease in size over the past two years of the Rwandan Hutu FDLR militia, a notorious rebel group operating in eastern Congo.

The Enough Project conducted interviews with more than 100 miners in North and South Kivu, the majority of which viewed the transformation to a clean minerals trade as a way to liberate themselves from slave-like work conditions. Over the past year, many miners in the Kivus have changed livelihood strategies to working in conflict-free mines in neighboring provinces or in the agriculture or small business sectors. These miners, however, need greater security and increased start-up capital to succeed.

'The Dodd-Frank law is making a serious dent on the militias in eastern Congo, cutting their profits from the conflict minerals of tin, tantalum, and tungsten by more than 60 percent,” said Fidel Bafilemba, co-author of the report and Enough Project policy consultant based in Goma. “Miners, despite their lower incomes in the short term, support the reforms that will free them from the slave-like conditions they have lived through in the mines. Companies that have profited from the trade—electronics, jewelers, tin smelters—should establish a miners empowerment fund to increase employment in the region, including micro-finance for mining communities.'

The ongoing fighting spurred by the M23 rebels in eastern Congo has increased instability in the region, further deterring responsible investment in the Kivus. The rebellion, reportedly backed by Rwanda, threatens to derail the progress that has been made in cleaning up the conflict minerals trade by opening up a floodgate of smuggling over the border into Rwanda.

Gaps in follow-up to the Dodd-Frank law allow armed groups in Congo to continue to trade gold and smuggle other conflict minerals into neighboring countries, which must be addressed immediately. From 2010 to 2011, Rwanda’s mineral exports rose 62 percent compared with only a 22 percent rise in domestic mining production and a decline in Congo’s mineral exports of 75 percent.

To ensure that progress made in the fight against conflict minerals continues to move forward, the report’s authors recommend the following:

• • Pressure Rwanda to stop support to M23. The U.S. and its international partners should demand Rwanda halt all support to the M23 rebellion, which represents a step backward in the fight against conflict minerals and armed violence.
• • Speed up certification of conflict-free mines. The U.S. should ensure that the independent monitoring mechanism of the International Conference on the Great Lakes Region, or ICGLR, is operational quickly and able to sanction smugglers.
• • Increase conflict-free sourcing. Companies from the automotive, jewelry, and retail sectors should support Congolese conflict-free mining by joining the Public-Private Alliance and by beginning projects similar to the electronics industry’s Solutions for Hope project to partner with suppliers sourcing from conflict-free mines in Congo.
• • Empower miners. The U.S., European Union, or E.U., the World Bank, and companies in the minerals supply chain should, as a matter of urgency, establish a miners’ empowerment fund to increase employment—especially in construction, microfinance, and agriculture.
• • Increase mine security. The U.S. and E.U. should support a significant increase in the number of Congolese mining police.

Download a KPMG Report on the Dodd-Frank regulations related to conflict minerals in pdf form Photo: Young men load bags of minerals (Enough / Sasha Lezhnev)